Lenders urged to act or risk fines

Lenders and mobile traders are being reminded they must be certified by the Commerce Commission or risk facing penalties of up to $600,000.

Anyone providing consumer credit or selling on credit needs to be approved from October 1, 2021, unless they are licensed or registered by the Financial Markets Authority or Reserve Bank of New Zealand.

The commission says to give certification it needs to be satisfied directors and senior managers of lenders are “fit and proper” to perform their role.

Anna Rawlings, commission chairwoman, says this means that they are considered financially sound, honest, reputable, reliable and competent to do their job.

Lending without being certified can result in penalties of up to $600,000 for a company or $200,000 for an individual.

“We are aware that some organisations provide consumer credit that might not see themselves as typical lenders,” explains Rawlings, pictured. 

“This is a good time for all organisations who might be providing consumer credit or relevant mobile trading services, to check their obligations, including whether they need to be registered and certified. 

“The consequences could be significant if they get it wrong. If you sell goods or services on deferred payment terms to individuals you should get advice about whether you need to comply.

“Businesses must take a proactive approach to certification and ask themselves, could this apply to me?”

Lenders providing consumer credit and mobile traders selling on credit that are registered as a financial service provider (FSP) on October 1, 2021, do not need to be certified until they complete their next annual FSP confirmation.

Any lenders that are not registered as a FSP on that date will need to be certified by the commission and registered as a FSP before they can provide consumer credit or mobile trading services.

Applications for certification should be sent in at least two months before lenders have to be certified, in order to be able to continue trading until the commission completes its processes. 

For more details, read the certification guidance on the commission’s website.